“STRUGGLING ALONG"

New Zealand Times, Volume XLIX, Issue 11293, 19 August 1922, Page 8

“STRUGGLING ALONG"

A BANKRUPT’S PLIGHT CRITICISM BY CREDITORS AT MEETING YESTERDAY. ASSIGNEE’S REJOINDER. A meeting of the creditors of John Francis Barry) of 8> Caroline street, grooor, was held yesterday in the Dominion Farmers' Institute, the Official ■ Assignee (Mr S. Tansley) presiding. Mr C. B. O’Donnell appeared for the bankiupt. WITH BORROWED MONEY. Bankrupt in his signed statement said that he had taken over a grocery business at 52, Moxham avenue, Kilbirnie, on October 10th, 1921. The purchase money for this had been lent him by his sister, he having paid a £2O deposit on September 22nd, 1921, and the balance (£275) on October I3tli following. It had been arranged between Brown, i lie viler, and himself that ho should take over the business in October, but owing to illness he did not enter into possession until November 10th. Prior to this lie had been out of employment for four months, and had made every endeavour to obtain work Without success. His sister had then offered him assistance, and hearing of the business privately had arranged for the money for the purchase. A PROMISING START. For the first few months the business had been paying for itself, but from the end of January had commenced to fall away. He had no living rooms in the shop and had to rent a room for himself and his wife at a rental of £1 per week. The shop rental was £7 11s 8d per month. The goodwill of the business, had oost him £4O. Also ho had been handicapped by his inexperience. Through ill-health Ire had been away from the shop a good deal, his wife carrying on; but eventually she was taken seriously ill and had to be sent to hospital. Whilst she was there bankrupt himself became ill, and a brotheir-in-lncw had to be called in to manage the business, of which ho had no practical knowledge. In April last,«.the sum of £l4 had been stolen from him, and the police bad been unable -to trace the theft. ATTEMPTS TQ SELL. When pushed by various merchants ho endeavoured to pay off their accounts but found that ho could uot keep payments up. Then he tried to dispose of the business privately, and had numerous inquiries, but because of the lack of living rooms no deal was concluded. He regretted the steps taken on closing down the shop practically straightaway, as a possible buyer had called soon after the seizure-bailiff took possession and had seemed very intent. Since then the landlord had received several inquiries. Had Moore and Wilson uot pressed him for settlement the place would have been sold

satisfactorily, and each, of the creditors would have received probably 20s in the £. The principal unsecured creditors were owed amounts totalling £522 12s 2d. The assets of bankrupt consisted of stock-in-trade £135 and book debts £l6, a total of £151; the deficiency thus being £371 12s 2d. A SISTER’S OFFER. The representative of Moore and Wilson stated that their course had been taken because they could get no satisfaction from the bankrupt at all, even after their case had gone through the courts and a judgment summons issued. Hence their action. Mr O’Donnell said that the bankrupt had consulted him at the time that Moore, Wilson and Co. had put the bailiff into possession on a distress warrant. He had endeavoured to bring about a settlement. Miss Barry, the principal creditor,' had generously offered to forgo a percentage of her claim of £295, in order that a private settlement might be arrived at. She would have accepted 7 10S) half the amount owing, and wth this large, reduction in the total of liabilities it was probable that a dividend of 10s in the £ would have been paid to all concerned. Now, however, a bankruptcy petition having been forced upon Barry, she would appcar on the list as a creditor for the full amount owing, and it was problematical whether the dividend would exceed 2s 6d in the £. “STRUGGLING ALONG.” It seems to me that the man was struggling along; I don’t know how he “ade a living at all,” remarked the Official Assignee. A oreditor (to bankrupt): What were your takings? Bankrupt: About £2O a week, or less than that. X should, say about £l4 to £ls per week. At first they were £25 to £3O per week. A creditor: I can’t see that we should have received 10s in the £ as bankrupt’s solicitor states if we had bad a private settlement, on the figures you have there. Mr O’Donnell said that about four days before filing this proposal had been made. Had the figures furnished him by the bankrupt been correct there would have been a dividend ol IQs in the £. The total liabilities, less this £147 10s .reduction, would have been £375. He understood that the assets would amount to £175 or more when the sale of the business had been ooncluded. “Goodwill was what was troubling us; we thought that we could sell the business for something over the £l5O, including £125 for stock and £ls for the goodwill,” he said. Mr Tansley: These things are all very well on paper. NO CAPITAL. “I think it is just a case of misfortune,” was the opinion of the Official Assignee. “He has had a hard row to hoe, and competition- has been very keen. The trouble to me seems to have been that he had no capital to work on.” | “The position seems to-be very bad,” i said one creditor. “He went into business nine months ago on some money borrowed from his sister. So in eight or nine months he has lost

over £IOO. I don’t know if the bankrupt can explain this.” “That can be done very easily,” replied Mr O’Donnell. “He knew nothing of the business, and his family was afflicted with illness. He had to call in a brother-in-law to help him run it, and sometimes he would have to close down the business for half-a-day at a time as no one would be there. He laboured under a big handicap and competition was very close. No one has been able to make the business pay before.” “A POOR EXPLANATION.” “The fact of his having no capital doesn’t enter into this,” -repeated the creditor. “The explanation of his representative is a very Ixjor one. What we want to know is how he managed to lose £4O a month. We can appreciate a man being ‘up against it,’ but where did this money go?” Bankrupt replied that there was a great deal of dead stock in the place when he took it over and that he had had to take thrs with the shop. He had been practically working for nothing. “Is there any suggestion that the bankrupt has been living extravagantly P” asked Mr Tansley. “Is there anything of a criminal nature?” No reply was forthcoming. “Well, I don’t know how you lost the money,” admitted the Officiil Assignee after bankrupt had denied having any vices. Mr O’Donnell stated that the actual loss had .been about £3B per month. Of the money, paid when he had entered the business £4O had been .for goodwill. He thought that the. estimate of the value of the stock remaining was somewhat conservative. TEE MATTER OF PAYMENTS. ’ After examining bankrupt’s salesbook a creditor expressed the opinion that, as the figures showed a sale of £l2O c month bankrupt must have made at least 174 per cent, profit, or roughly £2O, monthly. “There is no record of payments,” announced Mr. Tansley. ’ ‘AVliet do you suggest, gentlemen ? A statement lof his receipts and payments ? 1 don’t know what else you can got. I | must say that the statement doesn’t seem altogether satisfactory ; but, all the same, he’s had a bad run.” “We need to make these proceedings more difficult,” argued a creditor. “There is getting abroad the idea that a man has only to file Iris petition and come down here, and that is the end of it. I don’t wish to make a scapegoat of Mr Barry; but we must protect ourselves.” “Well, of course, there are several actions pending at the present time,” said the Official Assignee. “But very often the creditors won't turn up, and when they do they won’t say anything Then they won’t pass a resolution to have the man. publicly examined because it is going to oost them money. And the Government won’t do it for them.” A STATEMENT DESIRED. Another creditor considered that some explanation of the deficiency was due to them. The bankrupt had lost a good deal of money per week and he did not know what had become of it.. Even admitting his solicitor’s figures and bankrupt’s heavy hospital expenses, these did not clear the position up. He moved that bankrupt should

furnish a statement of his payments. “Get it on paper,” was the advice of the .Official Assignee. The motion was duly seconded and carried, and the meeting adjourned until Friday, August 25th.